Fixed rate mortgages increasingly popular

Figures released today (May 21st) show that demand for five-year fixed rate mortgage deals has increased for the third month in a row.

Figures released today (May 21st) show that demand for five-year fixed rate mortgage deals has increased for the third month in a row.

The Abbey Mortgage Index study found that of the mortgage borrowers questioned 30 per cent would opt for a five-year fixed rate deal.

Phil Cliff, Abbey Mortgage director, explained that the statistics indicate borrowers are cautious about the current economic climate and are looking for financial security in "uncertain economic times".

Mr Cliff, commented: "Whilst the May decision by the Bank of England was to maintain the base rate at five per cent, inflationary pressures mean that it is unlikely to fall again soon, and some commentators even think that inflation could lead to increasing mortgage rates."

Standard Rate Variable (SRV) loans are, by comparison, significantly less popular with just one per cent of those questioned saying they would opt for SRV loans if they had to remortgage tomorrow.

The news comes in the wake of figures released this month from the Council of Mortgage Lenders (CML) that show 82.5 per cent of first-time buyers used an intermediary in the first quarter of 2008.